| Consensus | Actual | Previous | |
|---|---|---|---|
| Month over Month | 0.0% | -0.1% | 0.1% |
| Year over Year | 2.3% | 2.8% |
Highlights
Canada GDP ended 2022 with a 0.1 percent contraction after rising 0.1 percent in November, below expectations that had centered on unchanged activity. However, the flash estimate for January 2023 points to a 0.3 percent rebound as gains in the mining, quarrying, and oil and gas extraction, wholesale trade, professional, scientific and technical services, and transportation and warehousing sectors outweigh declines in construction and retail trade.
In December, weakness came from goods-producing industries, where activity contracted 0.6 percent on the month, while services were flat. Overall, 12 of 20 industrial sectors expanded over the month.
Within goods-producing industries, a 4.0 percent drop in mining, quarrying, and oil and gas extraction explained much of the decrease, with unplanned maintenance impacting production. Overall energy was down 2.3 percent. Agriculture, forestry, fishing and hunting were down 0.3 percent. Activity increased in other goods sectors, including gains of 0.4 percent in both construction and manufacturing, with durable manufacturing up 0.6 percent and non-durables 0.2 percent.
Within services, the picture was more mix. Transportation and warehousing, down 1.0 percent, was impacted by adverse weather. Wholesale trade was down 1.3 percent, and management of companies and enterprises down 2.2 percent. On the upside, public sector activity increased another 0.4 percent in December and retail sales grew 0.8 percent.
Overall, growth slowed down to 0.2 percent in the fourth quarter, the slowest pace since the second quarter of 2021. In 2022 as a whole, GDP still expanded 3.6 percent.
The slowdown conforms to the Bank of Canada's projected growth pattern.
In December, weakness came from goods-producing industries, where activity contracted 0.6 percent on the month, while services were flat. Overall, 12 of 20 industrial sectors expanded over the month.
Within goods-producing industries, a 4.0 percent drop in mining, quarrying, and oil and gas extraction explained much of the decrease, with unplanned maintenance impacting production. Overall energy was down 2.3 percent. Agriculture, forestry, fishing and hunting were down 0.3 percent. Activity increased in other goods sectors, including gains of 0.4 percent in both construction and manufacturing, with durable manufacturing up 0.6 percent and non-durables 0.2 percent.
Within services, the picture was more mix. Transportation and warehousing, down 1.0 percent, was impacted by adverse weather. Wholesale trade was down 1.3 percent, and management of companies and enterprises down 2.2 percent. On the upside, public sector activity increased another 0.4 percent in December and retail sales grew 0.8 percent.
Overall, growth slowed down to 0.2 percent in the fourth quarter, the slowest pace since the second quarter of 2021. In 2022 as a whole, GDP still expanded 3.6 percent.
The slowdown conforms to the Bank of Canada's projected growth pattern.
Market Consensus Before Announcement
GDP for December is expected to remain unchanged on the month following a run of marginal gains.
Definition
Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. In contrast to most industrialised countries a monthly estimate is provided derived from the value added by labour and capital in transforming inputs purchased from other producers into that industry's output. Data for the reference month are usually released close to the end of the second month after the reference period.
Description
Instead of producing an advanced quarterly GDP figure and revising it the following two months, Statistics Canada releases monthly estimates of real GDP at Basic Prices. This release breaks down real output by seven goods-producing industries and twelve service-producing industries, and includes special aggregations such as business sector, non-business sector, and industrial production.
The sources of data used for monthly and quarterly estimates often differ and leads to very different estimates for certain items, such as price deflators. As a result, the monthly figures are not perfectly correlated with the quarterly numbers. However, the monthly data do give some idea of where the quarter is headed and especially in an uncertain environment, they are closely watched. While industrial production is closely watched in the U.S., it is not in Canada especially since the economy has become increasingly dominated by services. However, the goods sector is more vulnerable to wide swings in output compared to services, and exports remain dominated by industrial output.
The sources of data used for monthly and quarterly estimates often differ and leads to very different estimates for certain items, such as price deflators. As a result, the monthly figures are not perfectly correlated with the quarterly numbers. However, the monthly data do give some idea of where the quarter is headed and especially in an uncertain environment, they are closely watched. While industrial production is closely watched in the U.S., it is not in Canada especially since the economy has become increasingly dominated by services. However, the goods sector is more vulnerable to wide swings in output compared to services, and exports remain dominated by industrial output.
